Dingdong (Cayman) Ltd ADR

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to the Ding Dong Limited third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Please note that this event is being recorded. I will now turn the conference over to the first speaker today, Nikki Jung, Director of Investor Relations. Please go ahead, sir.

Thank you. Hello, everyone, and welcome to Dingdong's Third Quarter 2025 Earnings Call. With me today are Mr. Changlin Liang, our founder and CEO, and Mr. Song Wang, our CFO. You can refer to our Third Quarter 2025 financial results on our IR website at ir.100.me. You can also access a replay of this call on our website when it becomes available a few hours after its conclusion. For today's call, management will go through their prepared remarks, which will be followed by a question and answer session. Before we continue, I would like to refer you to our Safe Harbor event in our earnings press release, which also applies to this call, as we will be making forward-looking statements Please note that our numbers stated in the following management prepared remarks are in RMB terms. And we will discuss non-GAAP measures today, which are mostly explained and reconciled to the most comparable measures reported in our earnings release and the findings with SEC. I will now turn the call to our first speaker today, the founder and the CEO of Dingdong, Mr. Liang.

Thank you to all the investors, analysts, and partners who support Dingdong online and offline. Thank you for participating in the Q3 performance meeting of Dingdong Maicai in 2025. Until 2025 Q3, Dingdong Maicai has achieved a profit of 12 consecutive seasons under the non-GAAP standard. Thank you very much. Hello everyone, thank you for participating in Dingdong's Q3 2025 earnings call.

SFQ3 2025, Dandong has maintained profitability under non-GAAP standards for 12 consecutive quarters and under GAAP standards for seven consecutive quarters. Despite a higher baseline compared to the same period last year, revenue has achieved year-over-year growth, which marks the seventh straight quarter. This sustained expansion and steady achievement of profit targets fully demonstrate Dandong's strategic resilience and execution excellence amid the current complex market and competitive landscape, providing strong momentum for advancing our long-term strategy. Next, I'll review the key highlights of Q3 operations and share our insights and outlooks for the business.

Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 The same as last year, there is growth. This is also Dingdong's historically modest and the highest income system. Under the non-GAAP standard, the net profit is 100 million yuan, the net profit rate is 1.5%. Under the GAAP standard, the net profit rate is 0.8 billion yuan, the net profit rate is 1.2%. Based on the 24-year Q3 business rapid growth, we continue to maintain the trend of growth and continue to make profits.

In Q3, 2025, Dingdong reported a GMV of RMB 7.27 billion and a revenue of RMB 6.66 billion, both increasing slightly year on year. This marked Dingdong's highest ever quarterly GMV and revenue. Non-GAAP net profit was RMB 0.1 billion with a profit margin of 1.5%. While GAAP net profit was RMB 0.08 billion with a margin of 1.2%. Building on the strong growth seen in Q3 2024, we continue to sustain our growth momentum and stay profitable.

今年以来,公司在好商品体系的建设中已取得显著成效。 一批好商品不仅有效提升了用户粘性与复活率, 也为整体经营增长提供了有力支撑。 以数据为例, In September, the number of SQ was 37.2%, contributing 44.7% of the total GNV. Compared to the time of the start of the 4G strategy in January, the SQ ratio was only 14.1%, contributing only 16.4% to GNV. Now both have achieved a rapid rise. More and more good products have attracted more and more users to order. The turnover of Q3's monthly orders has increased by the same ratio. This year, the company has made notable progress with its good product system.

A series of good products has effectively enhanced user retention and repurchase rates, while also significantly supporting overall GMV growth. For instance, in September, SKUs classified as good products comprised 37.2%, generating 44.7% of total GMV, a rapid jump from January. When the 4G strategy was launched, and the share of good products SKUs was 14.1%, and their GMV contribution was 16.4%. The growing number of these good products has attracted more users to place orders on Dingdong. In Q3, the monthly order conversion rate increased by 1.6 percentage points year over year, and the number of monthly ordering users grew by 4.1%. Additionally, good products have further strengthened user mindshare. The average monthly order frequency reached a record 4.6 times in Q3, up 4.9% year-over-year, with member placing an average of 7.7 orders per month, a 1.3% year-on-year increase.

从区域角度来看,本季度江浙沪区域GMA延续了稳健的正向增长态势。 The overall total increase reached 1.4%. As a strategic core of the Shanghai market, on the basis of achieving a higher productivity in the early stage, this season has still maintained a stable operation. The growth of the whole area provides solid basic support. As for the rapid infiltration period of Jiangsu and Zhejiang regions, the growth momentum is still abundant. This quarter's GDP has the same growth rate of up to 3.6%. In the 19 cities covered by Jiangsu and Zhejiang regions, in addition to the newly opened Xuanzhen and Chuzhou in this quarter, nine cities have achieved more than 10% growth. Among them, the Wenzhou market performed well, with a growth rate of 60%. From a regional perspective, the GMV in Jiangsu, Zhejiang, and Shanghai continued its steady upward trend this quarter, increasing by 1.4% year-over-year.

Shanghai, as the strategic core market, maintains stable operations, leveraging its high penetration rate to support the region's overall growth. Meanwhile, Jiangsu and Zhejiang, which are still in the face of rapid market penetration, sustain strong growth, with GMV rising 3.6% year-over-year. Of the 19 cities in the region, excluding the recently expanded cities of Shenzhen and Tuzhou, nine cities delivered growth of over 10% with Wenzhou performing exceptionally well, with growth exceeding 60%, reflecting significant consumption potential. These results clearly indicate that the market demand in Jiangsu and Zhejiang is still largely untapped. The existing mature city's operational capacity and the expansion potential in new cities together present substantial opportunities for future growth.

In the next three years, we will continue to develop Thank you very much.

In Q3, building on our ongoing implementation of the 4G strategy of good users, good products, good services, good mindset, we introduced a new development framework called One Big, One Small, One World to guide a company's next stage of growth. OneBake emphasizes our high volume top selling product strategy. Building on the initial successes of our good product strategy and approach, we are now dedicated to developing a top selling product system. We believe that a deep understanding of products arises not only from economies of scale, but also from the structural opportunities discovered through refined operations, which is precisely the long-term significance of our top selling product strategy.

. . . . . Thank you very much. Unlike bestsellers, small but beautiful products prioritize user value and unique experiences over scale.

Conversely, high-volume, top-selling products prioritize market fundamentals such as sourcing raw materials, category resilience, and scalability. At Dingdong, we set clear standards for creating blockbuster products. They must possess core competitiveness, ideally with universal appeal for potential for wide consumer appeal. By systematically analyzing production resources, efficiently managing supply chains, and brand building, these products are well positioned for operational success and growth. Additionally, Blockbuster products should align with existing channels, meet genuine consumer needs, and have low loss rates coupled with high market scalability. During the 100-day summer campaign from June 21 to September 30, over 100 top-selling products were developed, laying a strong foundation for our high-volume top-selling product strategy.

其大一小一世界当中的一小指的是 We can see that in the core market, such as Shanghai, Suzhou, Hangzhou and other places, our warehouse network has a higher density. Based on the current layout, we will further shift the focus to more small and medium-sized cities in the Jiangzhou area, such as the newly opened Xuanchen and Suzhou in this quarter. These cities are generally composed of traditional retail industries that continue to shrink. At the same time, consumers have a good purchasing power, especially in the video category, showing a higher cost-benefit ratio. Although the general improvement in living standards and the maturity of consumption concepts, local residents are increasingly concerned about the quality of goods and the health of their property, which provides a wide market space for high-quality freshness and food.

The one small in one big, one small, one world refers to establishing frontline fulfillment stations in smaller cities and expanding into those markets. Our warehousing network is already dense in key areas like Shanghai, Suzhou, and Hangzhou. Building on this, we plan to focus our expansion on smaller and medium-sized cities in the Jiangsu, Zhejiang, and Shanghai regions, such as Xuncheng and Chuzhou, which we launched this quarter. These cities tend to experience a decline in traditional retail, yet their consumers demonstrate strong purchasing power, especially in discretionary spending in food categories. As living standards rise and consumption habits evolve, local residents increasingly value product quality and health, creating a significant opportunity for high-quality fresh groceries.

In the process of exploring the market of small and medium-sized cities, we gradually summed up and formed a system of We continue to verify and optimize in the actual operation. Compared with urban cities, we have implemented strategies in cities. We have used new methods, product structure configuration and performance assessment mechanisms, etc. to make targeted adjustments. We use small-scale dining tables and tea houses as the core catchers. We strive to provide products that are affordable and cost-effective for consumers. This strategic direction has become the turning point for us in the current fierce competition environment. As of the third quarter, we have accumulated and newly opened 40 front-line stores this year, 17 of which have been added in the third quarter, successfully expanding the small cities such as Shanghai Chongming Island, Nantong, Rugao, Xuancheng, Chuzhou, etc. Exploring and deepening the small city market in Jiangzhou is the way we have found in the complex competition pattern and the answer to growth.

In exploring markets in small and medium-sized cities, we have developed a systematic approach to market expansion, continuously refining it through real-world operations. Compared with mature cities, we have made specific adjustments to our city entry strategies, user acquisition methods, product configurations and performance metrics. Our core focus is on dining and coffee table leisure scenarios in small cities. aiming to offer consumers high-quality, reliable, and affordable products. This strategic direction has proven to be a key breakthrough for us in today's highly competitive market environment. By the third quarter, we had opened 40 new frontline fulfillment stations this year, including 17 in the third quarter, successfully expanding into small city markets such as Chongming Island in Shanghai, Rugao in Nantong, Xuancheng in Chuzhou, By exploring and developing small city markets in Changsu, Zhejiang, and Shanghai, we have found a clear strategic path to breakthrough and sustainable growth in an increasingly competitive environment.

最后,一大一小一世界中的一世界指的是海外市场的拓展。 依托于公司在国内市场积累的深厚新鲜供电能力, 我们具备了拓展海外业务的底细于基础。 目前我们已与新加坡 Fairprice, Finally, the one world in one big, one small, one world strategy refers to the expansion into international markets.

By leveraging our robust Domestically developed fresh grocery supply chain, we're confident in our ability to grow overseas. We have foreign partnerships with top-tier partners like Fairprice in Singapore, DFI in Hong Kong, Become Key, and Hong Kong TV Mall. We're also pleased to see a large number of fresh groceries and packaged foods developed by Ding Dong have been widely embraced by overseas consumers.

Finally, I would like to update everyone on the perspective of Q4 in 2025. Currently, the competition in the retail sector has become commonplace in the industry. Both platform and offline merchants continue to expand their resources and invest in a competitive market. Promoting the overall market competitiveness continues to grow, but we believe that by using our technology in public chain, Thank you. Thank you.

Now let me share with you our outlook for Q4 2025. Industry-wide competition in the instant retail sector is intensifying, with both platforms and offline merchants increasing their investments to gain market share. This has led to a rise in overall market competition. Nevertheless, building on the one big, one small, one world framework introduced in Q3 and leveraging our strengths in supply chain, product development, and IT systems bolstered by sustained profitability and solid cash reserves, Dingdong is confident in forging a unique, quality-focused, efficient, and resilient growth path through intense competition and in maintaining last year's scale and non-gap profitability in Q4. That concludes my remarks. Thank you. Now I invite our CFO, Wang Song, to discuss the company's financial status.

Thank you, Mr. Liang.

Hello, everyone. Before I present our financial performance, please note that all figures are in RMB.

Dingdong Real Estate achieved a revenue of 66.6 billion yuan, a growth of 1.9% in the same ratio, and a growth of 1.5% in the same ratio for seven consecutive seasons. GAAP's net profit volume is 100 million yuan, and the net profit volume is 1.5%. GAAP's net profit volume is 0.8 billion yuan, and the net profit volume is 1.2%. In terms of funds, Q3's operating cash flow is 1.4 billion yuan, which is the 9th consecutive season. After the end of Q3, after Q7, our actual oil funds continue to increase to 30.3 billion yuan.

In Q3, 2025, Dandong reported revenue of RMB 6.66 billion, marking a 1.9% year-over-year growth and maintaining positive growth for seven straight quarters. Non-get net profit reached RMB 0.1 billion with a 1.5% net profit margin, while get net profit was RMB 0.08 billion with a 1.2% margin. We had net operating cash inflow of RMB 0.14 billion in Q3, the ninth consecutive quarter of positive cash flow. By the end of Q3, after deducting short-term borrowings, our actual cash owned increased to RMB 3.03 billion.

接下来我们来看一下Q3的具体财务情况。 Q3的营收为66.6亿元,同比增长1.9%。 Next, let's review the specific financial results for Q3.

Revenue for Q3 reached RMB 6.66 billion, marking a 1.9% year-over-year increase. GMV was RMB 7.27 billion, up 0.1% compared to the previous year. The scale growth mainly stemmed from a general rise in order volume, which increased by 2.2% year-over-year in Q3. This quarter, our B2B business continued to grow steadily, with revenue expanding by 67.4% year-over-year, and its revenue share rose by 1.9 percentage points year-over-year.

Q3's net profit rate is 28.9%, which is 0.9% lower than the previous quarter. This quarter, the company continues to adjust its product strategy, and while doing good product strategy, it is leaning towards large items, increasing the supply of high-quality products, and continuing to deepen the industrial chain system. The focus is to introduce high-quality products that meet the market needs. At the same time, we will carry out a continuous replacement of products with lower user preference. By listing the core categories of high-quality products, we will further focus on improving the overall competitiveness of the products. At the same time, in an environment where the competition is intense, we will continue to implement the active operation strategy of Maoli. We will definitely return to the general consumer to improve the market feasibility of high-quality products, stabilize the user base and market reputation.

Gross profit margin was 28.9%, down 0.9 percentage points year over year. The decline in gross profit narrowed on a quarter-over-quarter basis. During the quarter, the company maintained its focus on its good product strategy by refining its product lineup, emphasizing flagship items, and increasing the supply of high-quality goods. It continued to enhance its supply chain system by prioritizing high-quality products that meet market demands. while systematically phasing out slow-moving goods with low user preference. This high-quality in, low-quality out approach enabled the company to focus core categories, thereby enhancing overall product competitiveness. At the same time, in a highly competitive instant retail environment, the company actively managed gross profit margins, rewarding consumers

improving market access for high-quality products, and steadily expanding its user base and market reputation. The share price increased by 1.5%. The share price increased by 0.04%. The share price increased by 0.02%. The share price decreased by 0.01%. The share price increased by 36.3%. The share price decreased by 1.4%. These data show that we are determined to create the best user experience through continuous optimization services and create long-term value by gaining user trust.

The fulfillment cost ratio was 21.5%, up by 0.1 percentage points compared to last year. Although the overall fulfillment cost ratio stayed stable year over year, we continued to prioritize service improvement. This quarter, our on-time delivery rate reached 97%, up by 1.5 percentage points from the previous year. The product negative review rate was 0.04%, and rider negative reviews Reviews were at 0.02%, each decreasing by 0.01 percentage points annually. The average fulfillment time for incident orders was 36.3 minutes, down by 1.4 minutes year-over-year. These results highlight our ongoing efforts to optimize services, enhance user experience, build user trust, and generate long-term value.

Q3's sales fee rate is 1.9%. The sales and marketing expense ratio was 1.9%, a decrease of 0.3 percentage points year over year.

Going forward, we'll strengthen our top-selling product strategy, making it a core growth driver and traffic generator. By focusing resources on mindshare penetration and efficient conversion, we'll continuously enhance the overall return on marketing investment.

Q3's management and development costs are 4.9% of the total single income. The cost is the same as last year. We will continue to focus on the development of food development, agricultural technology, and data algorithm technology. We will not only strengthen the ability to develop products, but also the ability to digitize the supply chain.

Combined G&A and R&D expenses represented 4.9% of revenue, similar to the same period last year. We'll maintain our focus on R&D investment in food research, agricultural technology, and data algorithms. Additionally, we'll continuously enhance our product development capabilities and strengthen digital integration throughout the entire supply chain.

In Q3 of 2025, we achieved a 1.5% growth rate, We recorded a non-GAAP net profit margin of 1.5% with a net profit of RMB 0.1 billion.

Meanwhile, our GAAP net profit margin was 1.2%, amounting to RMB 0.08 billion this quarter.

As of the end of Q3, cash and cash add-ons, short-term cash, short-term investment and long-term interest rates amounted to $39.4 billion. We continue to optimize the efficiency and financing structure of funds. After the short-term investment of Q3, our actual free funds amounted to the highest value in history, which is $30.3 billion, compared to an increase of $0.8 billion.

As of the end of Q3, the total of cash, cash equivalent, short-term restricted funds, short-term investment, and long-term wealth management products stood at RMB 3.94 billion. We maintain efforts to improve capital efficiency and optimize our financing structure. After deducting short-term borrowings, our net equity funds hit a record high of RMB 3.03 billion, up RMB 0.08 billion from the previous quarter.

That concludes our presentation for today.

Operator, we can now proceed to the Q&A session. Thank you.

We will now begin the question and answer session. To ask a question, you may press star, then 1 on a telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please state your question in Chinese first and then repeat it in English for the convenience of everyone on the call. At this time, we will pause momentarily to assemble our roster. And our first question today will come from Erica Chu of Jefferies. Please go ahead. Erica, you may be muted. On your end, your line is live here. Erica, is your line muted? We can move on to our next question. Our next question will come from Yang Bai of CICC. Please go ahead with your question.

My question is about industry competition. Just now, Mr. Guan mentioned that the current continuous retail competition is still very intense. And Shenzhen is also the main battlefield in this area. We see giants such as Ali, Meituan, Jingdong, etc. continue to invest more and more. How does the company view the current competitive pattern? What are the challenges that this competition brings to the company? Of course, does this also include some new opportunities? Thank you, management, for taking my question. The instant retail market remains highly competitive, and the fresh groceries are at the heart of this battlefield. Industry giants like Alibaba, Meituan, and Dingdong are all making significant investments. How does Dingdong view the current competitive landscape? What challenges does it bring, and are there new opportunities behind it? Thank you.

Thank you for the question.

Indeed, competition in instant retail has never been quiet. Fresh groceries are not only the most competitive part of the market but also the most valuable. We constantly ask ourselves, how can we not just survive in competition, but grow meaningfully through it?

首先要看到,目前市场的主流打法仍然集中在价格竞争,通过补贴和低价换取短期流量与规模增长,这是阶段性的策略,但不是长期的答案。 丁东选择的方向是主动建立差异化优势,我们主要有两条战略路径。

We observed that the mainstream approach in today's market still revolves around price competition, using subsidies and discounts to drive short-term traffic and scale. This may work in the near term, but it's not sustainable long-term. At Dingdong, our path is to build differentiation proactively, guided by two major strategic paths.

In terms of users, we have a strong 4G strategy. Our core logic is to use good products to attract good users. This means that we do not pursue traffic, but to build a high-quality user structure to connect different products and experiences. First, on the user side, we firmly execute our 4G strategy.

Our philosophy is simple yet powerful. Good products attract good users. We're not chasing mass traffic, but focusing on building a high-quality user base through differentiated products and experiences. In the short term, this may not create explosive growth, but in the long run, it leads to healthier, compounding growth. When the market eventually returns to the fundamentals of value and efficiency, this foundation will become our strongest moat.

Second, in the power supply sector, we insist on one inch narrow and one meter deep. Our deep root core area continues to penetrate to the origin. From the production of raw materials to self-produced and self-produced, from warehouse logistics to digitalization and smart energy construction, we strive to achieve the ultimate in every key part. Whether it is the development of large items, food research and production, or the basic facilities such as IT, AI, etc., Second, on the supply chain side, we follow the principle of one inch wide, one mile deep.

We focus deeply on our core areas, going all the way to the source, from direct sourcing at farms to in-house R&D and production. and from warehousing and logistics to digital and AI infrastructure. Whether it's developing best-selling products, investing in food innovation, or strengthening traceability, IT, and AI systems, all these efforts aim to build a supply chain capability that is uniquely Ding Dong's. This strength doesn't show overnight, but it becomes the most resilient and hardest to replicate assets in the long run.

In summary, we chose a long-term path. In addition to short-term price and scale battles, we are more concerned about long-term efficiency battles and ability battles. As the market gradually returns to rationality, those companies with real supply and product capabilities and organizational capabilities will be able to pass through the cycle and win the future. We believe that today's patience, determination, and construction will become the competitiveness of tomorrow. After the sale, time will finally stand on our side. Thank you.

In summary, we're committed to a long-term path. Beyond short-term battles over price and scale, we focus on long-term battles of efficiency and capability. As the market becomes more rational, those who truly possess supply, product, and organizational strength will outlast the cycle and win the future. We believe that our patience, discipline, and long-term investment today will become our core competitiveness tomorrow. After the noises fade, time will ultimately stand on our side. Thank you.

Our next question today will come from Erica Chu of Jefferies. Please go ahead. Can you hear me?

Yes. I can hear you.

Hi, Eric.

Oh, hello. Hello, can you hear me? Yes, we can. Mr. Liang, Mr. Wang, I'm sorry. Mr. Liang, Mr. Wang, hello. Congratulations to the company for continuing to achieve very good results this quarter, especially considering the intense competition in retail at the moment. So, the large-scale product strategy mentioned earlier, I don't know if it can be combined with these large-scale products in Q3 next year. Let me translate that question. First of all, congratulations on the company's continued excellent performance this year. This quarter, especially considering the extremely fierce competition in the instant retail market, could you elaborate on the aforementioned top-selling product strategy, especially specifically in conjunction with the top sellers from this year's third quarter summer sales campaign? Thank you.

Okay, thank you for your question. Indeed, the performance of large-scale products this summer has made us more determined to drive the long-term strategic direction of product power growth. In the past, we started to look at products from a channel point of view, but now we are changing our thinking from a defensive point of view to a product manager's point of view, from a focus point of view to a full focus point of view. This means that we have to start from the production site like a real product manager, and focus on consumers to design the whole life cycle of the product. We are not just selling the product, but we hope that every product can move users. Shenzhen's essence is non-standard, high-sufficiency, and strong strength. So we use digitalization and IT technology to improve management width and efficiency, compress the middle link, and reduce the cost of purchase. At the same time, we continue to reduce the loss rate by standardizing the quality control system. Thank you for your question.

The strong performance of our top-selling products this summer has reinforced our long-term commitment on product-driven growth. Previously, we viewed products mainly through a channel lens, but now we're shifting from a channel distributor mindset to a product manager mindset, moving from a ding-dong perspective to a full-chain perspective. This requires us to think and act as comprehensive product managers, designing every product's full lifecycle from its origin to the hands of the consumer. We're no longer just selling products, but create products that truly resonate with users. Fresh groceries are a naturally non-standardized highly perishable, and seasonal. To address this, we harness digital and IT technologies to expand our management scope and efficiency, eliminate intermediaries, reduce procurement costs, and lower spoilage rates through standardized quality control, thereby improving the overall profitability of our supply chain.

Compared to Xiaomi's limited-scale products, our large-scale product strategy is more focused on stability, controllability, and scale. This certainty is very important for building user trust. A high-quality experience that can continue to provide a stable supply of large-scale products will form a strong user mentality and will bring a higher recovery rate and brand loyalty.

Unlike the small but beautiful products that are limited in scale, our top seller approach focuses more on stability, controllability, and economies of scale. This consistency is key to earning user trust. A top-selling product that reliably offers a high-quality experience and maintains a stable supply will deepen brand recognition in the minds of our users, resulting in increased repurchase rates and stronger brand loyalty.

We have a set of system methodology on the big single product. For fruit, we will evaluate the potential of a product from six dimensions. Market size, supply chain capacity, product competitiveness, operating capacity, channel frequency and yield capacity. After selection, we lock the most potential landmark products. Through national and even global deployment, centralized procurement, unified quality control, division and processing, and scale sales, we have greatly reduced costs and losses, and developed greater product value. More importantly, through this process, we have created a whole set of repeatable system capabilities, from the production site screening, Our systematic approach to developing top-selling products involves assessing a category like fruits across six key dimensions.

Market size, supply chain capabilities, product competitiveness, operational efficiency, channel fit, and profitability. We carefully select the most promising targets and then scale them across the country or even into international markets. By leveraging centralized procurement, standardized quality control, tiered processing, and large-scale fulfillment, we're able to significantly reduce costs and losses, therefore enhancing product value. Furthermore, this process has helped us build a comprehensive set of replicable system capabilities, covering origin selection, planting, harvesting, processing, warehousing, transportation, and end-user sales, establishing a standardized supply chain framework. This enables us to better control the upstream supply chain, ensuring Danone's products are uniquely differentiated and virtually irreplaceable.

From the results, this year's low-end data has fully verified our direction. With fruit as an example, the relationship between Hongxin and Liyue has achieved nearly 15 million GMVs in the low-end, and has increased by 22 times. The user recovery rate has significantly increased, and the quality is outstanding. . . . . . .

This summer campaign results validated our strategy. For example, Guangxi Red Heart Pamelo generated nearly 15 million RMB in GMV, marking a 22-fold increase year-over-year with notable growth in user repurchase rates and a low quality complaint rate of just 0.84%. Similarly, the new product Guiwei Laichi achieved 9 million RMB in GMV, experiencing significant increases in revenue and repurchase rates.

These figures show that distinctive high-quality individual products that resonate with consumers can strengthen brand identity and serve as key drivers of sales growth.

Therefore, we believe that the top-selling product strategy is more than just a sales tactic. It's a long-term approach to developing capabilities. This strategy enables us to create a sustainable, competitive advantage centered on products, merging brand appeal with the benefits of scale. Thank you.

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you again for joining our call today. If you have any further questions, please feel free to contact us or request through our website. We look forward to speaking with everyone in our next earnings call. Have a good day and have a good night.

The conference is now concluded. We thank you for attending today's presentation and you may now disconnect your lines.